July 18, 2018

Oil boom in southern New Mexico ignites groundwater feud with Texas

Laura Paskus

The Rio Grande near Mesilla in 2014.

In the vast, high desert of southeastern New Mexico, underground aquifers are a vital source of water for drinking and agriculture. Groundwater has also become essential to a booming oil business, which is sprawling across the border from Texas and needs the water for hydraulic fracturing (“fracking”) operations.

Oil well fracking requires large amounts of water, which is injected underground to break up and mobilize the underground petroleum resource. In many parts of this region, without water for fracking, there is no access to oil.

But because of differences in state law, oil companies have found the groundwater harder to access in New Mexico. So they are laying pipes across the state line, pumping groundwater in Texas to serve oil wells in New Mexico.

Unfortunately, all the groundwater comes from the same aquifer – the Pecos Valley Aquifer – that straddles the state line. And some officials in New Mexico fear that groundwater pumping on the Texas side will eventually deplete the aquifer on the New Mexico side.

Aubrey Dunn, the state land commissioner in New Mexico, has gone so far as to accuse Texas landowners of water theft. They’re circumventing state law, he asserts, by serving oil wells in New Mexico with groundwater extracted in Texas.

“Really, the situation happening in southeast New Mexico is out of control, in my opinion,” Dunn said. “And it’s really exploded in the past 1824 months.”

The oil business in this region of New Mexico, centered on the city of Carlsbad, has grown so fast that rural two-lane roads in the region are congested with semitrailers hauling drilling equipment. Thousands of oil field workers have created a rural rush hour as they commute between pop-up “man camps” where many workers live and the hundreds of drilling sites pockmarking the desert.

It’s just part of the boom times in the Permian Basin, a vast petroleum reserve underlying west Texas and southeast New Mexico.

State law in New Mexico creates a priority water rights system for groundwater. This means older wells have priority access to groundwater. Newcomers like oil exploration companies can apply for a permit to access groundwater, but they may not get one if the supply is scarce.

Much of the groundwater serving oil wells in New Mexico comes from just across the border in Loving County, Texas. Property owners there are selling groundwater to oil exploration companies, which have laid pipelines across the border to serve oil drilling in New Mexico.

It’s all perfectly legal, given the loopholes in groundwater law between the two states, as exemplified by a proud press release on June 5 issued by Solaris Midstream. The water supply and management company, based in Houston, specializes in serving oil exploration in the Permian Basin. The company announced it is building a new 11-mile water supply line capable of moving 150,000 barrels of water per day from Loving County, Texas, across the state line into Eddy County, New Mexico.

“This pipeline will serve an area that is currently generating some of the best production results in the Permian, but operators are constrained by limited sources of water,” Bill Zartler, chief executive of Solaris, said in the press release. The company did not respond to an interview request.

Todd Votteler, a consultant based on Austin, Texas, who specializes in negotiating water conflicts, said part of the issue is that Loving County does not have a groundwater district. As a result, groundwater in the county is subject to the “right of capture” under state law, which basically means anyone who can capture it may take all they want, even if it harms someone else.

A simple solution, Votteler said, would be for Loving County to form a groundwater district, which could then craft rules to regulate extraction. Many such districts in Texas, for instance, ban exporting groundwater outside their boundaries.

But that doesn’t seem likely.

Loving County Commissioner Bill Wilkinson said he does not see a problem with all the groundwater exports from his county. And he isn’t worried about oil exploration depleting the aquifer.

“I’ve never seen the volume of water that we’re pulling now. What I’m hearing is, so far the groundwater is holding – the water tables aren’t dropping,” said Wilkinson, who makes money leasing land to oil companies. “Most of the time, the ones doing the talking are the ones not profiting from the water sales. That’s my opinion of the ones that gripe.”

Dunn, the New Mexico state land commissioner, was elected as a Republican. But he recently left the party, and is now running for U.S. Senate as a Libertarian. One reason for the party switch, he said, is that Republicans are too beholden to the oil industry, and he cares about more than that.

“I’m not anti- oil and gas, but I’m anti-tearing up the environment,” Dunn said. “I care about water in New Mexico.”

New Mexico’s state engineer is responsible for managing water rights in the state and issuing permits for new groundwater wells.

As the state land commissioner, Dunn can only influence the groundwater drilling process by regulating access to some 13 million acres of state trust lands. He collects leasing revenue, for instance, when an oil company wants to drill on state trust lands.

Oil companies are also required to make lease payments if they lay a water pipeline across state trust lands. That hasn’t been happening in all cases, he said.

Dunn also asserts that New Mexico is missing out on millions of dollars in sales taxes, which must be paid to the state for every barrel of groundwater that’s extracted. The groundwater piped into the state from Texas, he said, is subject to the tax because it’s getting pumped from the same aquifer for use in New Mexico.

If 1 million barrels of groundwater are pumped into New Mexico every day, Dunn said, that’s about $70,000 a day in sales tax the state is missing.

Dunn blamed the state engineer, Tom Blaine, for failing to protect New Mexico’s groundwater. Blaine, he said, should sue the state of Texas to force it to enact groundwater regulations along the state line.

The state engineer’s office declined to make Blaine available for an interview and did not respond to questions sent by email.

“It’s kind of an unusual situation,” Votteler said. “We’ve been focused on interstate issues concerning surface water for many decades. And now groundwater is becoming more of an issue in terms of interstate commerce.”

“Jobs and industry are important to New Mexico, but I think it needs to be done responsibly,” Dunn said. “They’re taking water that’s New Mexico’s, pumping it out in Texas, and selling it back to us. It’s depleting a resource from future generations being able to use it. We need to think about the future.”

This article originally appeared on Water Deeply. You can find the original here. For important news about water issues and the American West, you can sign up to the Water email list.